Madrid, Nov 20 - Spanish foods group Ebro Puleva will initiate exclusive talks with British Sugar over the sale of its Azucarera sugar subsidiary, a company source told Reuters on Thursday.
"The board decided yesterday to authorize exclusive talks with British Sugar," a company source said.
"We think the offer will meet our expectations," he said.
British Sugar is owned by Associated British Foods Plc .
Separately, Spain's stock market regulator CNMV said it has suspended trading in the shares of Ebro Puleva.
Ebro Puleva put its sugar business up for sale in May following attempts by European sugar refiners to consolidate in the wake of European Union sugar subsidy reforms in 2006.
Germany's largest sugar producer Suedzucker and a consortium formed by sugar provider ED&F Man and grower-owned cooperative Cristal Union were also seen as potential buyers.
Ibersecurities analysts believe Ebro Puleva could fetch between 500 and 550 million euros for Azucarera, which accounts for about a quarter of Ebro's income and posted sales of 434.6 million euros in the nine months to September.
The unit is targeting sales of 602 million euros in 2008.